Recruitment and legal experts have dashed hopes that there are grounds for a legal challenge to the Agency Worker Regulations.

The Association of Recruitment Consultancies (ARC) revealed it has obtained legal opinion suggesting that parts of the regulations – due to come into effect in October 2011 – were of “questionable legality” and should be challenged through a judicial review.

The ARC is concerned that two provisions in the regulations included by the UK government will mean that any organisation involved in the supply chain of relating to agency worker recruitment could be liable for action in the event of a dispute. It says that it is unfair as agencies merely acting as the middle man, connecting a recruitment agency with an employee, could be legally responsible – what it calls a “fictional contract”.

But Anne Fairweather, head of public policy at the Recruitment and Employment Confederation (REC), said these provisions were a sensible way of adapting to the unique nature of the UK recruitment market.

“A directive is always going to be much broader, so it is up to the government to interpret the spirit of the legislation,” she told Personnel Today. “These intermediary organisations often dictate the pay rates so they need to have responsibility.”

Michael Ball, employment partner at law firm Halliwells, added any legal challenge was likely to fail.

He said: “The complaint about the draft regulations appears to be in relation to the meaning of agency worker under Regulation 3, which provides that a person may still be treated as an agency worker even where there is a contract with an intermediary.

“Whilst this is not a requirement under the directive it is not contrary to the purpose of the legislation. Rather this appears to be an anti-avoidance provision to make clear that contractual arrangements with intermediaries may not prevent the person being treated as an agency worker.”

Adrian Marlowe, director at the ARC, said he was “at a loss” to explain why the REC would not support an action to protect recruitment agencies, but added the association was in discussions with a number of other industry bodies about the potential legal action.